We are a startup company and have contract to develop a new product for a client. They are paying in stages and have recently paid us part of the fee. These payments are in advance of the work to allow us to run the company, buy materials and equipment etc, however we have hit COVID-19 and work has slowed, suppliers are not available etc and we are heading towards the end of our tax year (April 5th).
My question is, we need the available funds to do the job and that is all budgeted for, however we can't spend it before the end of the tax year. It is possible to account for that budget without having it seen as profit and be liable for corporation tax.
We are not trying to avoid paying CT we simply don't have the available budget to make a profit.
So hows about an intro before we start. We always ask newbies!
Usual stuff - what prof body do you belong to, do you work for yourself or in a practice/ firm, who is your MLR with, are you a bookkeeper or accountant, what qualifications, how long in role, where up to in your studies-what exams passed/with what body/who your MLR is with/in midst of doing, where based, what you did before this role? That sort of thing. Helps get to know you but also how best to pitch answers.
You are a company, so Im not sure why the tax year to 5 April has anything to do with anything. When is your year end?
How much in advance payments have you received so far?
-- Edited by Cheshire on Thursday 26th of March 2020 10:22:32 AM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Sorry Chris but this is a professional forum for professional bookkeepers and accountants only.
Limited companies do not normally have mid month tax year ends as a start up - what does companies house state?
I would absolutely wait for that Accountant to call you back and get them on board, for the year end issue for starters and to sort out your question and give advice that is specific to your own circumstances. If they dont phone you fairly rapidly to start the conversation then I would suggest you look for another.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
